The payment settlement entity (PSE) must report the following information on Form 1099-K, Payment Card and Third Party Network Transactions:
- Name, Address, and TIN: The name, address, and taxpayer identification number (TIN) of the participating payee to whom one or more payments in settlement of reportable payment transactions are made.
- Gross Amount of Reportable Payment Transactions: The gross amount of the reportable payment transactions with respect to each participating payee. This includes the total dollar amount of all reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts.
- Merchant Category Code (MCC): The four-digit MCC used by the payment card industry to classify the payee for the payment card transactions reported on Form 1099-K. If the PSE or the entity on whose behalf the PSE is filing uses an industry classification system other than, or in addition to, MCCs, the PSE should assign an MCC that most closely corresponds to the description of the payee's business.
- Number of Payment Transactions: The number of payment transactions (not including refund transactions) processed through the payment card/third party payer network.
- Monthly Gross Amounts: The gross amount of the total reportable payment transactions for each month of the calendar year. These boxes may be used by filers who participate in the Combined Federal/State Filing Program and/or who are required to file paper copies of this form with a state tax department.
- State Information: If applicable, the state information boxes to report payments for up to two states, including the state name, the payer's state identification number, and the amount of the state payment.
- Backup Withholding: Any backup withholding on the reportable payment transactions.
- Card Not Present Transactions: The gross amount of the total reportable payment card/third party network transactions for the calendar year where the card was not present at the time of the transaction or the card number was keyed into the terminal.
The PSE must ensure that all the required information is accurately reported on Form 1099-K and furnished to the IRS and the participating payee.
Sources:
§ 6050W. Returns relating to payments made in settlement of payment card and third party network transactions
Publication 1220 (9/2023)
Instructions for Form 1099-K (01/2022)
Instructions for Form W-8BEN-E (10/2021)
General Instructions for Certain Information Returns (2023)
Instructions for Forms 1099-MISC and 1099-NEC (01/2024)
2023 Instructions for Schedule C (2023)
